Exhibit 10.35

             
                             MASTER LEASE AGREEMENT



         THIS   MASTER   LEASE   AGREEMENT,   dated  as  of   November  1,  1996
("Agreement"), between General Electric Capital Corporation, with an office at 4
North Park Drive, Suite 500, Hunt Valley, MD 21030 (hereinafter called, together
with its successors and assigns, if any, "Lessor"),  and North American Vaccine,
Inc., a Canadian  corporation  organized and existing under the Canada  Business
Corporations  Act with its mailing  address and chief place of business at 12103
Indian Creek Court, Beltsville, Maryland 20705 (hereinafter called together with
its successors and assigns, if any "Lessee").

WITNESSETH:

I.  LEASING:

         (a) Subject to the terms and conditions set forth below,  Lessor agrees
to lease to  Lessee,  and  Lessee  agrees to lease from  Lessor,  the  equipment
("EQUIPMENT")  described in Annex A to any schedule hereto  ("SCHEDULE").  Terms
defined in a Schedule and not otherwise  defined  herein shall have the meanings
ascribed to them in such Schedule.

         (b)  The   obligation  of  Lessor  to  purchase   Equipment   from  the
manufacturer or supplier  thereof  ("SUPPLIER")  and to lease the same to Lessee
under any  Schedule  shall be subject  to receipt by Lessor,  prior to the Lease
Commencement  Date (with  respect to such  Equipment),  of each of the following
documents in form and substance  satisfactory to Lessor: (i) a Schedule relating
to the Equipment then to be leased  hereunder,  (ii) a Purchase Order Assignment
and Consent in the form of Annex B to the  applicable  Schedule,  unless  Lessor
shall have  delivered its purchase order for such  Equipment,  (iii) evidence of
insurance which complies with the requirements of Section X, and (iv) such other
documents  as Lessor may  reasonably  request.  As a further  condition  to such
obligations  of Lessor,  Lessee shall,  upon delivery of such Equipment (but not
later than the Last Delivery Date specified in the applicable  Schedule) execute
and deliver to Lessor a Certificate of Acceptance (in the form of Annex C to the
applicable  Schedule)  covering such Equipment,  and deliver to Lessor a bill of
sale  therefor (in form and  substance  satisfactory  to Lessor).  Lessor hereby
appoints  Lessee its agent for  inspection  and acceptance of the Equipment from
the Supplier.  Upon execution by Lessee of any  Certificate  of Acceptance,  the
Equipment  described  thereon  shall be deemed to have been  delivered  to,  and
irrevocably accepted by, Lessee for lease hereunder.

II.  TERM, RENT AND PAYMENT:

         (a) The rent payable  hereunder and Lessee's right to use the Equipment
shall  commence  on the  date of  execution  by  Lessee  of the  Certificate  of
Acceptance  for such Equipment  ("LEASE  COMMENCEMENT  DATE").  The term of this
Agreement  for any  Equipment  shall be the period  specified in the  applicable


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Schedule for such Equipment.  If any term is extended,  the word "term" shall be
deemed to refer to all extended  terms,  and all  provisions  of this  Agreement
shall apply during any extended terms,  except as may be otherwise  specifically
provided in writing.

         (b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor in writing. Payments of rent shall be in the amount
set forth in, and due in  accordance  with,  the  provisions  of the  applicable
Schedule. If one or more Advance Rent(s) (as specified in Schedule) are payable,
such Advance Rent(s) shall be (i) set forth on the applicable Schedule, (ii) due
upon  acceptance by Lessor of such Schedule,  and (iii) when received by Lessor,
applied to the first rent payment and the  balance,  if any, to the final rental
payment(s) under such Schedule.  In no event shall any Advance Rent or any other
rent payments be refunded to Lessee.  If rent is not paid within ten days of its
due date,  Lessee  agrees to pay a late charge of*  on, and in addition  to, the
amount of such rent but not exceeding the lawful maximum, if any.

         (c) Rent payments under any Schedule shall be allocated proportionately
to the  Equipment on such  Schedule on the basis of the values  assigned to each
unit  of  such  Equipment  on  Annex  A to such  Schedule,  provided  that  such
allocation  shall not be interpreted to allow Lessee to make partial  payment or
to partially terminate this Agreement, except as otherwise permitted hereunder

         (d) All Rent and other  payments  to be paid under this Lease to Lessor
shall be paid in U.S.  currency and without any deduction or withholding for, or
on account of, any domestic or foreign taxes. If under  applicable law, any Rent
or other sum cannot be paid  without a  deduction  or  withholding,  then Lessee
shall  increase  such Rent or other  payment  to  Lessor so that the net  amount
received by Lessor after such deduction or  withholding  (and the payment of any
other  amount that must be  deducted  or withheld as a result of such  increase)
shall be equal to the full amount that Lessor would have  received had such Rent
or other payment not been subject to any deduction or withholding.

III.  RENT ADJUSTMENT:

         (a) The periodic rent payments in each Schedule have been calculated on
the assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective  corporate  income tax rate  (exclusive  of any  minimum tax rate) for
calendar-year  taxpayers ("EFFECTIVE RATE") will be * each year during the lease
term.

         (b) If,  solely  as a  result  of  Congressional  enactment  of any law
(including,  without  limitation,  any modification of, or amendment or addition
to, the  Internal  Revenue Code of 1986 (the  "CODE")),  the  Effective  Rate is
higher  than * for any year during the lease  term,  then Lessor  shall have the
right to increase such rent payments by requiring


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payment of a single  additional  sum equal to the  product of (i) the  Effective
Rate  (expressed  as a decimal)  for such year less * (or, in the event that any
adjustment  has been made  hereunder for any previous  year,  the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted  Stipulated  Loss Value.  The adjusted  Stipulated  Loss Value
shall be the Stipulated Loss Value (calculated as of the first rental due in the
year for which  such  adjustment  is being  made)  less the  product  of the Tax
Benefits that would be allowable  under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all subsequent years
of the lease term) times the  Effective  Rate  (expressed  as a decimal) (in the
year for which such  adjustment  is being made).  Lessee shall pay to Lessor the
full  amount of the  additional  rent  payment on the later of (i) ten (10) days
after  receipt  of  notice  or (ii) the  first  day of the year for  which  such
adjustment is being made.

         (c) If,  solely  as a  result  of  Congressional  enactment  of any law
(including, without limitation, any modification of, or amendment or addition to
the Code),  the Effective  Rate is lower than* for or any year during the lease
term,  then  Lessor  shall  pay to Lessee a single  additional  sum equal to the
product of (i) the Effective Rate  (expressed as a decimal) for such year less *
(or, in the event that any  adjustment  has been made hereunder for any previous
year, the Effective Rate  (expressed as a decimal) used in calculating  the next
previous adjustment) times (ii) the adjusted Stipulated Loss Value. The adjusted
Stipulated Loss Value shall be the Stipulated  Loss Value  (calculated as of the
first rental due in the year for which such  adjustment  is being made) less the
product of the Tax  Benefits  that would be allowable  under  Section 168 of the
Code (as of the first day of the year for which  such  adjustment  is being made
and all subsequent  years of the lease term) times the Effective Rate (expressed
as a decimal)  (in the year for which such  adjustment  is being  made).  Lessor
shall pay to Lessee the full amount of the additional  rent payment on the later
of (i)  receipt  of notice  or (ii) the  first  day of the year for  which  such
adjustment is being made.

         (d)  Lessee's  and  Lessor's  obligations  under this Section III shall
survive any expiration or termination of this Agreement.

IV.   TAXES:   Except as provided  in Sections III and  XV(c), Lessee shall
have no liability for taxes (i)  imposed by the United States of America or
any  State or political subdivision thereof which  are based on or measured
by the net income of Lessor  or the net worth of Lessor, (ii) imposed on or
with respect to, or that would not have been  imposed but for, any transfer
by Lessor  of any  interest in  any Equipment  or any  part thereof,  (iii)
attributable to any period after the later  of the return of the  Equipment
to Lessor or  the termination of the  Lease, except to the  extent relating
to Lessee's use or possession of the Equipment  or payment due hereunder or
events occurring  or matters arising  prior to or  simultaneously with such
return or termination,  or (iv) which would  not have been imposed  but for


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       Commission


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and only to the extent of the negligence or willful  misconduct of Lessor or the
failure of Lessor to comply with any certification,  documentation, reporting or
similar  requirement  or that would not have been imposed but for the conduct by
Lessor in any taxing  jurisdiction of activities  unrelated to the  transactions
contemplated  by this  Lease.  Lessee  shall  report (to the  extent  that it is
legally permissible) and pay promptly all other taxes, fees and assessments due,
imposed,  assessed or levied against any Equipment (or the purchase,  ownership,
delivery, leasing, possession, use or operation thereof), this Agreement (or any
rentals or receipts hereunder),  any Schedule,  Lessor or Lessee by any foreign,
federal,  state or local government or taxing authority during or related to the
term  of  this  Agreement,   including,  without  limitation,  all  license  and
registration  fees,  and  all  sales,  use,  personal  property,  excise,  gross
receipts, franchise, stamp or other taxes, imposts, duties and charges, together
with any penalties,  fines or interest thereon (all hereinafter called "TAXES").
Lessee  shall  (i)  reimburse   Lessor  upon  receipt  of  written  request  for
reimbursement  for any Taxes  charged to or  assessed  against  Lessor,  (ii) on
request of Lessor,  submit to Lessor  written  evidence of  Lessee's  payment of
Taxes,  (iii) on all reports or returns show the  ownership of the  Equipment by
Lessor,  and (iv) send a copy thereof to Lessor.  Lessee,  at its  expense,  may
contest any Tax by appropriate  legal  proceedings  provided the  non-payment of
such Tax, or such  proceedings,  will not, in the opinion of counsel for Lessor,
adversely  affect  the  title,  property  interest  or  rights  of Lessor in the
Equipment and provided,  further, that if requested by Lessor, Lessee shall have
given to Lessor security  sufficient in form and amount, in Lessor's  reasonable
judgment,  to fully  satisfy the amount of the  contested  Tax and any potential
fines, penalties or costs.

V.  REPORTS:

         (a) Lessee  will notify  Lessor in writing,  within ten (10) days after
Lessee  becomes aware that any tax or other lien shall attach to any  Equipment,
of the full  particulars  thereof and of the  location of such  Equipment on the
date of such notification.

         (b) Lessee will within one  hundred  twenty  (120) days of the close of
each fiscal year of Lessee, deliver to Lessor, Lessee's balance sheet and profit
and  loss  statement,  certified  by  a  recognized  firm  of  certified  public
accountants. Upon request Lessee will deliver to Lessor quarterly, within ninety
(90) days of the close of each fiscal quarter of Lessee,  in reasonable  detail,
copies of Lessee's  quarterly  financial report certified by the chief financial
officer of Lessee.

         (c) Lessee will permit  Lessor to inspect any  Equipment  during normal
business hours and with reasonable  advance notice to Lessee of such inspection;
provided, however, that such persons shall comply with any reasonable conditions
imposed  by  Lessee   regarding   such   inspection  of  Equipment  in  Lessee's
manufacturing areas



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         (d) The  Equipment  will  initially  be delivered to and located at the
Equipment  Location  (specified  in the  applicable  Schedule)  and Lessee  will
promptly notify Lessor of any relocation of Equipment.  Upon the written request
of Lessor, Lessee will notify Lessor forthwith in writing of the location of any
Equipment as of the date of such notification.

         (e) Lessee will  promptly  and fully report to Lessor in writing if any
Equipment is lost or damaged  (where the estimated  repair costs would exceed *,
or is  otherwise  involved in an accident  causing  personal  injury or property
damage.

         (f) Within sixty (60) days after any written request by Lessor,  Lessee
will furnish a certificate  of an authorized  officer of Lessee  stating that he
has reviewed the  activities of Lessee and that,  to the best of his  knowledge,
there exists no default (as described in Section  XII(a) and (d)) or event which
with notice or lapse of time (or both) would become such a default.

VI.  DELIVERY, USE AND OPERATION:

         (a) All  Equipment  shall be  shipped  directly  from the  Supplier  to
Lessee.

         (b) Lessee agrees that the  Equipment  will be used by Lessee solely in
the  conduct  of its  business  and in a manner  complying  with all  applicable
federal, state, and local laws and regulations.

         (c) LESSEE  SHALL NOT MORTGAGE OR  HYPOTHECATE  ANY  EQUIPMENT,  OR THE
INTEREST OF LESSEE  HEREUNDER,  NOR SHALL LESSEE REMOVE ANY  EQUIPMENT  FROM THE
CONTINENTAL UNITED STATES, WITHOUT THE PRIOR WRITTEN CONSENT OF THE LESSOR.

         (d)  Lessee  may,  at its sole cost and  expense,  sublease  any of the
Equipment or assign all of its rights and  obligations  under the lease for such
Equipment  provided  Lessee  shall have first  notified  Lessor of the  proposed
sublease or assignment of such  Equipment and,  except as otherwise  provided in
this subsection  (d), Lessee shall have received  Lessor's prior written consent
(such  consent not to be  unreasonably  withheld or delayed) to such sublease or
assignment.  Notwithstanding anything to the contrary contained in the preceding
sentence,  at any time  during the term of the lease for any units of  Equipment
under  this  Agreement,  Lessee may sublet  all,  but not less than all,  of the
Equipment  described  on any one or more  Schedules  or assign all of its rights
under this  Agreement  with respect to the lease of such  Equipment,  (i) to any
transferee  which  shall,  as  the  result  of  a   reorganization,   merger  or
consolidation  directly involving Lessee, succeed to the business now carried on
by  Lessee or (ii) to any  entity  which is an  Affiliate  (as  defined  herein)
subsidiary of Lessee;  in each  instance,  without the prior written  consent of



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Lessor,  provided Lessor is given thirty (30) days' prior written notice of such
proposed sublease or assignment together with a copy of the proposed sublease or
assignment,  and such transferee shall (A) have assumed in writing,  in form and
substance  reasonably  satisfactory to Lessor,  all of the obligations of Lessee
under this Agreement  respecting the applicable  Equipment as if such transferee
were an original  signatory to this  Agreement and (B) be solvent and either (1)
have a net  worth  which is equal to or in  excess  of the net  worth of  Lessee
immediately  prior  to the  execution  of  this  Agreement  or (2)  have  caused
additional security reasonably  satisfactory to Lessor to be delivered to Lessor
prior to such sublease or assignment.  No such sublease or assignment  permitted
by this  subsection  (d) shall in any way  discharge or diminish any of Lessee's
obligations  hereunder  for the  lease  of such  Equipment.  Each  sublease  and
assignment  hereunder shall expressly provide that it is subject and subordinate
to this  Agreement,  and Lessee shall  further  assign its rights in and to such
sublease or assignment to Lessor as security for Lessee's obligations hereunder.
No sublease or assignment shall be for a term longer than the subject  Schedule.
Lessee and any assignee or sublessee shall execute all reasonable  documentation
required by Lessor to evidence the provisions of this subsection(d).

         (e)  Lessee  will  keep the  Equipment  free and clear of all liens and
encumbrances  other than  those  which  result  from acts of Lessor or any party
claiming by, through or under Lessor, or liens arising in the ordinary course of
the business of Lessee for sums not yet delinquent or which are being  contested
in good faith and for payment of which  adequate  assurance has been provided to
Lessor.

VII.  SERVICE:

         (a) Lessee will, at its sole  expense,  maintain each unit of Equipment
in good operating  order,  repair,  condition and appearance in accordance  with
manufacturer's recommendations,  normal wear and tear excepted. Lessee shall, if
at any time  requested  by Lessor in writing,  affix in a prominent  position on
each  unit  of  Equipment  plates,  tags or  other  identifying  labels  showing
ownership  thereof  by  Lessor.  

         (b) From and after the date of this Agreement, Lessee will not, without
the prior consent of Lessor, affix or install any accessory, equipment or device
on any Equipment if such addition will impair the originally  intended  function
or use of such Equipment. All additions, repairs, parts, supplies,  accessories,
equipment, and devices furnished, attached or affixed to any Equipment which are
not readily  removable  shall be made only in compliance  with  applicable  law,
including Internal Revenue Service guidelines,  and shall become the property of
Lessor. Lessee will not, without the prior written consent of Lessor and subject
to such conditions as Lessor may impose for its protection, affix or install any
Equipment to or in any other personal or real property.

         (c) Any alterations or  modifications to the Equipment that may, at any
time during the term of this Agreement, be required to comply



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with any  applicable  law,  rule or  regulation  shall be made at the expense of
Lessee.

VIII.  STIPULATED  LOSS VALUE:  Lessee shall promptly and fully notify Lessor in
writing if any unit of  Equipment  shall be or become lost,  stolen,  destroyed,
irreparably  damaged in the reasonable  determination of Lessee,  or permanently
rendered  unfit  for use from  any  cause  whatsoever  (such  occurrences  being
hereinafter  called  "CASUALTY  OCCURRENCES").  On the rental  payment date next
succeeding a Casualty  Occurrence (the "PAYMENT DATE"),  Lessee shall pay Lessor
the sum of (x) the Stipulated Loss Value (as specified on each Schedule) of such
unit  calculated  as of the  rental  next  preceding  such  Casualty  Occurrence
("CALCULATION  DATE");  and (y) all  rental  and  other  amounts  which  are due
hereunder  immediately  prior to the Payment  Date and  remaining  unpaid.  Upon
payment  of all sums due  hereunder,  (i) the term of this lease as to such unit
shall  terminate  (ii) the Rent and  Capitalized  Lessor's cost shall be reduced
proportionately  based  on the  value  assigned  to such  unit in Annex A to the
applicable  Schedule,  and  ((iii)  except  in the  case of the  loss,  theft or
complete  destruction  of  such  unit)  Lessor  shall  be  entitled  to  recover
possession of such unit.

IX. LOSS OR DAMAGE:  Lessee hereby assumes and shall bear the entire risk of any
loss, theft,  damage to, or destruction of, any unit of Equipment from any cause
whatsoever from the time the Equipment is shipped to Lessee until it is returned
to Lessor.

X. INSURANCE:  Lessee agrees, at its own expense,  to keep all Equipment insured
for such  amounts and against  such  hazards as Lessor may  reasonably  require,
including, but not limited to, insurance for damage to or loss of such Equipment
and liability  coverage for personal  injuries,  death or property damage,  with
Lessor named as  additional  insured and with a loss payable  clause in favor of
Lessor,  as its interest may appear,  irrespective  of any breach of warranty or
other act or omission of Lessee. All such policies shall be with companies,  and
on terms reasonably  satisfactory to Lessor.  Lessee agrees to deliver to Lessor
evidence of insurance  satisfactory to Lessor.  No insurance shall be subject to
any   co-insurance   clause.   Lessee   hereby   appoints   Lessor  as  Lessee's
attorney-in-fact  to make  proof of loss and  claim for  insurance,  and to make
adjustments  with insurers and to receive  payment of and execute or endorse all
documents, checks or drafts in connection with payments made as a result of such
insurance policies.  Any expense of Lessor in adjusting or collecting  insurance
shall be borne by Lessee.  Lessee will not make adjustments with insurers except
(i) with respect to claims for damage to any unit of Equipment  where the repair
costs do not exceed *, or (ii) with Lessor's written consent, such consent shall
not be  unreasonably  withheld or delayed.  Said policies shall provide that the
insurance  may not be altered or canceled by the insurer until after twenty (20)
days  written  notice to Lessor.  If Lessee has made the  payment  described  in
Section VIII above, Lessee shall be entitled to the insurance proceeds.



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In all other events, Lessor may, at its option, apply proceeds of insurance,  in
whole or in part, to (i) repair or replace Equipment or any portion thereof,  or
(ii) satisfy any obligation of Lessee to Lessor hereunder.  Notwithstanding  the
previous  sentence or Section VIII, the Lessee may cause any insurance  proceeds
to be  applied  directly  for the repair or  replacement  of  Equipment  if such
repairs or replacements are less than * for any one casualty and such repairs or
replacements are actually performed.

XI. RETURN OF EQUIPMENT:

         (a)  Upon  any  expiration  or  termination  of this  Agreement  or any
Schedule,  Lessee shall promptly,  at its own cost and expense:  (i) perform any
testing and repairs  required to place the  affected  units of  Equipment in the
same  condition and appearance as when received by Lessee  (reasonable  wear and
tear excepted) and in good working order for their originally  intended purpose;
(ii) if deinstallation,  disassembly or crating is required, cause such units to
be  deinstalled,   disassembled  and  crated  by  an  authorized  manufacturer's
representative  or such other  person as is  satisfactory  to Lessor;  and (iii)
return such units to a location  within a five hundred  (500) mile radius of the
original  Equipment  location in the  continental  United States as Lessor shall
direct.

         (b) Until Lessee has fully  complied with the  requirements  of Section
XI(a) above,  Lessee's rent payment  obligation and all other  obligations under
this Agreement shall continue from month to month notwithstanding any expiration
or termination of the lease term. Lessor may terminate such continued  leasehold
interest upon ten (10) days notice to Lessee.

XII. DEFAULT:

         (a) Lessor may in writing  declare this Agreement in default if: Lessee
breaches its  obligation to pay rent or any other sum when due and fails to cure
the breach  within *; Lessee  breaches any of its  insurance  obligations  under
Section X; Lessee breaches any of its other obligations under this Agreement and
fails to cure that  breach  within * after  written  notice  thereof  (provided,
however,  that no default shall be deemed to have occurred  under this clause in
the event that Lessee  commences a good faith effort to cure such breach  within
the aforesaid * period and diligently  prosecutes  such cure to completion,  and
such cure is completed  within * after the date of Lessor's  original  notice to
Lessee  of such  breach);  any  representation  or  warranty  made by  Lessee in
connection  with this  Agreement  shall be false or  misleading  in any material
respect when made;  Lessee becomes insolvent or ceases to do business as a going
concern;  any Equipment is illegally  used; or a petition is filed by or against
Lessee under any  bankruptcy or  insolvency  laws (and if such petition is filed
against Lessee,  it is not stayed or dismissed within 60 days). Such declaration
shall apply to all Schedules except as specifically excepted by Lessor.



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         (b) After default,  at the request of Lessor,  Lessee shall comply with
the provisions of Section XI(a).  Lessee hereby  authorizes  Lessor to enter any
premises  where any  Equipment  is  believed to be and take  possession  thereof
without  liability  for damages or  otherwise  (except for  physical  damage not
required by the  repossession of the Equipment).  Lessee shall,  without further
demand,  forthwith pay to Lessor (i) as liquidated damages for loss of a bargain
and not as a penalty, the Stipulated Loss Value of the Equipment  (calculated as
of the rental next preceding the  declaration of default),  and (ii) all rentals
and other sums then due  hereunder.  Lessor may,  but shall not be required  to,
sell  Equipment  at private or public  sale,  in bulk or in  parcels,  with such
notice as may be required by law, and without  having the  Equipment  present at
the place of sale; or Lessor may, but shall not be required to, lease, otherwise
dispose  of or keep idle all or part of the  Equipment.  The  proceeds  of sale,
lease or other  disposition,  if any,  shall be timely  applied in the following
order of  priorities:  (1) to pay all of Lessor's  costs,  charges and  expenses
incurred  in  taking,  removing,  holding,  repairing  and  selling,  leasing or
otherwise disposing of Equipment; then, (2) to the extent not previously paid by
Lessee, to pay Lessor all sums due from Lessee hereunder;  then (3) to reimburse
to Lessee any sums previously paid by Lessee as liquidated damages;  and (4) any
surplus shall be retained by Lessor.  Lessee shall pay any deficiency in (1) and
(2) forthwith.

         (c) The foregoing  remedies are cumulative,  and any or all thereof may
be  exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute.  Lessee shall pay Lessor's reasonable  attorney's fees
and costs upon a  default.  Waiver of any  default  shall not be a waiver of any
other or subsequent default.

         (d) Any default under the terms of this or any other agreement  between
Lessor and Lessee may be  declared  by Lessor a default  under this and any such
other agreement.

XIII.  ASSIGNMENT:  Lessor  may,  without  the  consent of Lessee,  assign  this
Agreement  or any  Schedule,  provided  that any such  assignee  shall  agree in
writing to take no action to interfere with Lessee's quiet  enjoyment and use of
the Equipment in accordance  with the terms of this  Agreement so long as Lessee
is not  in  default  hereunder  and to  assume  the  obligations  of  Lessor  in
accordance  with the  terms of this  Agreement.  Lessee  agrees  that if  Lessee
receives  written notice of an assignment from Lessor,  Lessee will pay all rent
and all other  amounts  payable  under any assigned  Equipment  Schedule to such
assignee or as instructed by Lessor. Lessee further agrees to confirm in writing
receipt of the notice of assignment as may be reasonably  requested by assignee.
Lessee  hereby  waives and agrees not to assert  against any such  assignee  any
defense,  set-off,  recoupment claim or counterclaim  which Lessee has or may at


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any time have against Lessor for any reason  whatsoever  except for any payments
rightfully  made by Lessee to an  assignee of Lessor  pursuant  to this  Section
shall  discharge the obligations of Lessee to Lessor with respect to, and to the
extent of, such payments.

XIV.  NET LEASE;  NO  SET-OFF,  ETC:  This  Agreement  is a net lease.  Lessee's
obligation  to pay rent and other  amounts due  hereunder  shall be absolute and
unconditional.  Lessee shall not be entitled to any abatement or reductions  of,
or set-offs against, said rent or other amounts, including,  without limitation,
those arising or allegedly arising out of claims (present or future,  alleged or
actual, and including claims arising out of strict tort or negligence of Lessor)
of Lessee  against  Lessor  under this  Agreement or  otherwise.  Nor shall this
Agreement  terminate or the  obligations  of Lessee be affected by reason of any
defect in or damage  to,  or loss of  possession,  use or  destruction  of,  any
Equipment from whatsoever cause,  except as otherwise provided herein. It is the
intention  of the  parties  that rents and other  amounts  due  hereunder  shall
continue  to be  payable  in all events in the manner and at the times set forth
herein unless the obligation to do so shall have been terminated pursuant to the
express terms hereof. Nothing herein shall be construed to relieve Lessor of any
of its  obligations  under this  Agreement or prevent  Lessee from  pursuing any
lawful remedy against Lessor for Lessor's breach of its  obligations  under this
Agreement in a separate action.


XV. INDEMNIFICATION:

         (a) Lessee hereby agrees to indemnify,  save and keep harmless  Lessor,
its  agents,  employees,  successors  and  assigns  from and against any and all
losses,  damages,  penalties,  injuries,  claims,  actions and suits,  including
reasonable legal expenses,  of whatsoever kind and nature,  in contract or tort,
or  otherwise  (except (i) if and only to the extent  caused by the  indemnified
party's gross negligence or willful  misconduct,  (ii) by Lessor's breach of its
representations  and warranties  contained in Section XIX(f) hereof or (iii) the
claim is based on a loss of Tax  Benefits  (as defined  under  subsection  XV(b)
below)),  and including,  but not limited to, Lessor's strict liability in tort,
arising out of (i) the selection, manufacture, purchase, acceptance or rejection
of Equipment,  the ownership of Equipment during the term of this Agreement, and
the  delivery,  lease,  possession,  maintenance,  uses,  condition,  return  or
operation of Equipment (including, without limitation, latent and other defects,
whether  or not  discoverable  by  Lessor or  Lessee  and any claim for  patent,
trademark  or  copyright  infringement  or  environmental  damage)  or (ii)  the
condition of Equipment sold or disposed of after use by Lessee, any sublessee or
employees of Lessee.  Lessee shall fully and promptly pay,  perform,  discharge,
defend,  indemnify and hold harmless Lessor and its  Affiliates,  successors and
assigns,  directors,  officers,  employees  and  agents  from  and  against  any
Environmental  Claim or Environmental  Loss. Lessee shall, upon request,  defend



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       Commission


                                        - 10 -


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any  actions  based on, or  arising  out of, any of the  foregoing.  In case any
action,  suit  or  proceeding  is  brought  against  any  indemnified  party  in
connection with any claim indemnified against hereunder,  such indemnified party
will promptly after receipt of notice of the  commencement of such action,  suit
or proceeding  notify Lessee hereof,  enclosing a copy of all papers served upon
such  indemnified  party,  but  failure to give such  notice or to enclose  such
papers shall not relieve Lessee from any liability  hereunder unless and only to
the extent such failure  prevents or materially  prejudices  Lessee's ability to
defend such claim, seek coverage under relevant  insurance  policies or mitigate
damages arising therefrom.

         (b) Lessee hereby  represents,  warrants and covenants  that (i) on the
Lease  Commencement  Date for any unit of Equipment,  such unit will qualify for
all of  the  items  of  deduction  and  credit  specified  in  Section  C of the
applicable  Schedule ("TAX  BENEFITS") in the hands of Lessor (all references to
Lessor in this Section XV include Lessor and the consolidated  taxpayer group of
which Lessor is a member), and (ii) at no time during the term of this Agreement
will Lessee take or omit to take,  nor will it permit any  sublessee or assignee
to take or omit to take,  any action  (whether  or not such act or  omission  is
otherwise permitted by Lessor or the terms of this Agreement), which will result
in the  disqualification  of any  Equipment  for,  or  recapture  of, all or any
portion of such Tax Benefits.

         (c) If as a  result  of a breach  of any  representation,  warranty  or
covenant of the Lessee  contained  in this  Agreement  or any  Schedule  (x) tax
counsel of Lessor (if  Lessor's  rights  hereunder  are assigned the tax counsel
shall be reasonably  satisfactory  to Lessee) shall determine that Lessor is not
entitled to claim on its Federal income tax return all or any portion of the Tax
Benefits with respect to any Equipment,  or (y) any such Tax Benefit  claimed on
the  Federal  income  tax  return of Lessor is  disallowed  or  adjusted  by the
Internal  Revenue  Service,  or (z)  any  such  Tax  Benefit  is  recomputed  or
recaptured (any such determination,  disallowance,  adjustment, recomputation or
recapture being hereinafter  called a "LOSS"),  then Lessee shall pay to Lessor,
as an indemnity and as additional  rent, such amount as shall, in the reasonable
opinion of Lessor,  cause  Lessor's  after-tax  economic  yields and cash flows,
computed on the same assumptions, including tax rates (unless any adjustment has
been made under Section III hereof, in which case the Effective Rate used in the
next preceding  adjustment shall be substituted),  as were utilized by Lessor in
originally  evaluating the transaction  (such yields and flows being hereinafter
called the "NET  ECONOMIC  RETURN") to equal the Net Economic  Return that would
have been realized by Lessor if such Loss had not occurred.  Notwithstanding the
foregoing a Loss shall not include any determination,  disallowance, adjustment,
recomputation or recapture which is a result of Lessor reporting this Lease as a
capital  lease for Federal  Income Tax  purposes,  for  reasons  other than as a
result of a breach of any  representation,  warranty  or covenant of the Lessee.



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Such amount shall be payable upon demand  accompanied by a statement  describing
in reasonable detail such Loss and the computation of such amount.

         (d) Lessee hereby further  represents,  warrants and covenants that all
amounts  includible in the gross income of Lessor with respect to the Equipment,
and all deductions or credits allowable to Lessor with respect to the Equipment,
will be treated as derived from or allocable to sources within the United States
in each and every  taxable  year of Lessor  throughout  the entire  term of this
Lease. If as a result of any breach of the representation, warranty and covenant
contained the  immediately  preceding  sentence,  any item of income,  credit or
deduction with respect to the Equipment  shall not be treated as derived from or
allocable to, sources with the United States for any taxable year or Lessor (any
such event hereinafter  referred to as a "FOREIGN LOSS"),  then Lessee shall pay
to Lessor as an indemnity, on the next succeeding rental payment date, or in any
event within 30 days after written  demand to Lessee by Lessor,  such amount as,
after  deduction  of all taxes  required  to be paid by Lessor in respect of the
receipt of such amounts under the laws of any federal, state or local government
or taxing authority of the United States, shall equal the sum of: (i) the excess
of (x) the foreign tax credits which Lessor would have been entitled to for such
year had no such Foreign Loss occurred over (y) the foreign tax credits to which
Lessor was limited as a result of such  Foreign  Loss and (ii) the amount of any
interest,  penalties  or  additions  to tax payable as a result of such  Foreign
Loss.

         (e) Lessee further  covenants that it shall be responsible  for paying,
and shall indemnify and hold harmless Lessor from any liability with respect to,
any Tax in respect of the transactions  contemplated by this Lease which results
from a change in Canadian law which,  without  more,  causes Lessor to incur any
Tax attributable  either directly or indirectly to its having or being deemed to
have a permanent  establishment,  residence or place of business or to otherwise
be doing business in Canada.

         (f) If, as a result of the  operation of Section  XV(d) or (e),  Lessee
would be required  to pay any  additional  sums Lessee  shall have the option to
purchase all (but not less than all) of the  Equipment  leased  hereunder for an
amount equal to * ("Purchase Price") as of the Purchase Date (as defined below).
The  "Purchase   Date"  shall  be  the  Rental   Payment  next   succeeding  the
determination  of the Fair Market Value of the Equipment as described in Section
XVIII.  Lessee may exercise this option provided it is not in default  hereunder
and has elected in writing to exercise the option  within  twenty  business days
after  Lessor  has  made  demand  under  Section  XV (d) or (e).  If  Lessee  is
purchasing  the  Equipment  under this  subsection,  Lessee shall pay Lessor the
Purchase  Price  plus any  Rent  then due  prior  to the  Purchase  Date and any
applicable taxes on the Purchase Date.



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         (g) All of Lessor's  rights,  privileges and  indemnities  contained in
this  Section XV shall  survive  the  expiration  or other  termination  of this
Agreement  and the  rights,  privileges  and  indemnities  contained  herein are
expressly  made for the  benefit  of, and shall be  enforceable  by Lessor,  its
successors and assigns.


XVI. DISCLAIMER:  LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR,  ITS AGENTS OR EMPLOYEES.  LESSOR DOES NOT MAKE, HAS
NOT  MADE,  NOR  SHALL  BE  DEEMED  TO  MAKE  OR  HAVE  MADE,  ANY  WARRANTY  OR
REPRESENTATION,  EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT  LEASED  HEREUNDER  OR  ANY  COMPONENT  THEREOF,  INCLUDING,   WITHOUT
LIMITATION,  ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,  QUALITY
OF MATERIALS OR WORKMANSHIP,  MERCHANTABILITY,  FITNESS FOR ANY PURPOSE,  USE OR
OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE (except
as provided in Section  XIX(f)).  All such risks,  as between Lessor and Lessee,
are to be borne by Lessee. Without limiting the foregoing,  Lessor shall have no
responsibility or liability to Lessee or any other person with respect to any of
the following, regardless of any negligence of Lessor (i) any liability, loss or
damage caused or alleged to be caused  directly or indirectly by any  Equipment,
any inadequacy thereof,  any deficiency or defect (latent or otherwise) therein,
or any other  circumstance in connection  therewith;  (ii) the use, operation or
performance  of  any  Equipment  or  any  risks  relating  thereto;   (iii)  any
interruption   of  service,   loss  of  business  or   anticipated   profits  or
consequential damages; or (iv) the delivery, operation, servicing,  maintenance,
repair,  improvement or  replacement  of any  Equipment.  If, and so long as, no
default  exists  under this Lease,  Lessee  shall be, and hereby is,  authorized
during the term of this Lease to assert and enforce,  at Lessee's  sole cost and
expense,  from time to time, in the name of and for the account of Lessor and/or
Lessee,  as their  interests may appear,  whatever  claims and rights Lessor may
have against any  Supplier of the  Equipment.  At Lessee's  request and expense,
Lessor agrees to pursue enforcement of any  manufacturer's  warranty that is not
assignable to Lessee.


XVII.  REPRESENTATIONS  AND WARRANTIES OF LESSEE:  Lessee hereby  represents and
warrants to Lessor that on the date hereof and on the date of  execution of each
Schedule:

         (a) Lessee has adequate  power and capacity to enter into,  and perform
under, this Agreement and all related documents (together,  the "Documents") and
is duly  qualified  to do business  wherever  necessary  to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.

         (b) The Documents have been duly authorized,  executed and delivered by
Lessee and constitute valid, legal and binding agreements of Lessee, enforceable
against Lessee in accordance with their terms, except


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       Commission

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to the extent that the enforcement of remedies  therein  provided may be limited
under  applicable  bankruptcy  and  insolvency  laws or similar  laws  affecting
creditor's rights or principles of equity.

         (c) No approval,  consent or withholding of objections is required from
any governmental  authority or instrumentality with respect to the entry into or
performance  by  Lessee  of the  Documents  except  such  as have  already  been
obtained.

         (d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment,  order, law or regulation  applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or By-Laws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge,  security interest or other  encumbrance upon any Equipment  pursuant to
any indenture,  mortgage,  deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.

         (e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee,  which will have a material  adverse  effect on the ability of Lessee to
fulfill its obligations under this Agreement.

         (f) The Equipment  accepted under any  Certificate of Acceptance is and
will remain tangible personal property.

         (g) Each balance sheet and statement of income  delivered to Lessor has
been prepared in accordance with generally accepted accounting  principles,  and
since the date of the most recent such  Balance  Sheet and  Statement of Income,
there has been no material adverse change.

         (h)  Lessee is and will be at all times  validly  existing  and in good
standing under the laws of the jurisdiction of its  incorporation  (specified in
the first sentence of this Agreement).

         (i) The Equipment  will at all times be used for commercial or business
purposes.

         (j) The  Lessee  is and shall  remain a United  States  Federal  Income
Taxpayer.

Notwithstanding  anything in this Agreement,  Schedules or Addendum's  hereto to
the contrary,  Lessee makes no representation or warranty regarding the truth or
accuracy of any financial projections or proformas furnished to Lessor by Lessee
except that the financial projections and proformas were reasonable  projections
of future events based on information  available at the time they were furnished
to Lessor.


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       Commission.

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<PAGE>


XVIII. PURCHASE OPTION:

         (a) So long as no default  exists  hereunder and the lease has not been
earlier  terminated,  Lessee  may at  lease  expiration,  upon at  least * prior
written notice to Lessor,  purchase all (but not less than all) of the Equipment
in any  Schedule on an AS IS BASIS for cash equal to its then Fair Market  Value
(plus all applicable sales taxes).  Upon receipt of the Fair Market Value,  plus
all applicable sales taxes, Lessor shall execute and deliver to Lessee a bill of
sale, without representation or warranty,  except that the Equipment is free and
clear of any  liens,  claims  or  encumbrances  created  by  Lessor or any party
claiming by,  through or under Lessor and other than those  created by Lessee or
any one claiming by, through or under Lessee.

         (b) "FAIR MARKET VALUE" shall mean the price which a willing buyer (who
is neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's-length transaction to a willing seller under no compulsion
to sell; provided, however, that in such determination:  (i) the Equipment shall
be assumed to be in the condition in which it is required to be  maintained  and
returned under this Agreement; (ii) in the case of any installed Equipment, that
Equipment shall be valued on an installed basis; and (iii) costs of removal from
current  location  shall not be a deduction from such  valuation.  If Lessor and
Lessee  are  unable to agree on the Fair  Market  Value at least * before  lease
expiration, Lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee) to  determine  Fair Market  Value,  and that  determination  shall be
final,  binding and conclusive.  Lessee shall bear all costs associated with any
such appraisal.

         (c)  Lessee  shall be  deemed  to have  waived  this  option  unless it
provides Lessor with written notice of its irrevocable  election to exercise the
same within * after Fair Market Value is determined (by agreement or appraisal).


XIX. MISCELLANEOUS:

         (a) LESSEE HEREBY  UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY  CLAIM OR  CAUSE  OF  ACTION  BASED  UPON OR  ARISING  OUT OF,  DIRECTLY  OR
INDIRECTLY,  THIS LEASE,  ANY OF THE RELATED  DOCUMENTS,  ANY  DEALINGS  BETWEEN
LESSEE AND LESSOR  RELATING TO THE  SUBJECT  MATTER OF THIS  TRANSACTION  OR ANY
RELATED TRANSACTIONS,  AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
LESSEE AND LESSOR.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING
OF ANY AND ALL  DISPUTES  THAT  MAY BE FILED IN ANY  COURT  (INCLUDING,  WITHOUT
LIMITATION,  CONTRACT CLAIMS, TORT CLAIMS,  BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY
NOT BE MODIFIED  EITHER ORALLY OR IN WRITING,  AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY


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       Commission.


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RELATED  DOCUMENTS,  OR TO ANY OTHER  DOCUMENTS OR  AGREEMENTS  RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION.  IN THE EVENT OF LITIGATION,  THIS LEASE
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

         (b) Unless and until Lessee  exercises  its rights under  Section XVIII
above or any addendum or Schedule hereto, nothing herein contained shall give or
convey to Lessee any right,  title or interest in and to any Equipment except as
a lessee.  Any cancellation or termination by Lessor,  pursuant to the provision
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any  Equipment  hereunder,  shall not release  Lessee from any then  outstanding
obligations  to  Lessor  hereunder.  All  Equipment  shall at all  times  remain
personal  property of Lessor  regardless of the degree of its  annexation to any
real property and shall not by reason of any  installation in, or affixation to,
real or personal property become a part thereof.

         (c) each reference contained in this Agreement to:

                               (1) "Adverse Environmental Condition" shall refer
                      to (i) the existence or the continuation of the existence,
                      of   an   Environmental   Emission   (including,   without
                      limitation,   a  sudden  or   non-sudden   accidental   or
                      non-accidental  Environmental  Emission),  of, or exposure
                      to,  any   substance,   chemical,   material,   pollutant,
                      Contaminant,  odor or  audible  noise or other  release or
                      emission  in,  into or  onto  the  environment  (including
                      without limitation, the air, ground, water or any surface)
                      at, in, by,  from or  related to any  Equipment,  (ii) the
                      environmental  aspect  of  the  transportation,   storage,
                      treatment or disposal of materials in connection  with the
                      operation  of any  Equipment  or (iii) the  violation,  or
                      alleged  violation of any  statutes,  ordinances,  orders,
                      rules, regulations, permits or licenses of, by or from any
                      governmental  authority,   agency  or  court  relating  to
                      environmental matters connected with any Equipment.

                               (2) "Affiliate"  shall refer, with respect to any
                      given  Person,  to any Person that  directly or indirectly
                      through  one  or  more  intermediaries,  controls,  or  is
                      controlled  by,  or is under  common  control  with,  such
                      Person.

                               (3) "Contaminant" shall refer to those substances
                      which  are  regulated  by or form the  basis of  liability
                      under any Environmental Law, including without limitation,
                      asbestos,    polychlorinated   biphenyls   ("PBCs"),   and
                      radioactive substances, or other material or



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                                        - 16 -



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                      substance  which  has in the past or  could in the  future
                      constitute a health, safety or environmental hazard to any
                      Person, property or natural resources.

                               (4)  "Environmental  Claim"  shall  refer  to any
                      accusation,   allegation,   notice  of  violation,  claim,
                      demand, abatement or other order on direction (conditional
                      or otherwise) by any governmental  authority or any Person
                      for  personal  injury  (including  sickness,   disease  or
                      death),  tangible or intangible property damage, damage to
                      the   environment   or  other   adverse   effects  on  the
                      environment,  or for  fines,  penalties  or  restrictions,
                      resulting  from or based  upon any  Adverse  Environmental
                      Condition.

                               (5)  "Environmental  Emission" shall refer to any
                      actual or threatened release,  spill,  emission,  leaking,
                      pumping,   injection,    deposit,   disposal,   discharge,
                      dispersal,  leaching  or  migration  into  the  indoor  or
                      outdoor  environment,  or  into  or  out  of  any  of  the
                      Equipment,  including, without limitation, the movement of
                      any Contaminant or other substance  through or in the air,
                      soil, surface water, groundwater or property.

                               (6)  "Environmental  Law" shall mean any federal,
                      foreign, state or local law, rule or regulation pertaining
                      to the protection of the environment,  including,  but not
                      limited  to,  the  Comprehensive  Environmental  Response,
                      Compensation,  and  Liability  Act  ("CERCLA")  (42 U.S.C.
                      Section   9601   et   seq.),   the   Hazardous    Material
                      Transportation  Act (49 U.S.C.  Section 1801 et seq.), the
                      Federal  Water  Pollution  Control Act (33 U.S.C.  Section
                      1251 et seq.), the Resource  Conservation and Recovery Act
                      (42 U.S.C.  Section  6901 et seq.),  the Clean Air Act (42
                      U.S.C. Section 7401 et seq.), the Toxic Substances control
                      Act  (15  U.S.C.   Section  2601  et  seq.),  the  Federal
                      Insecticide,  Fungicide,  and  Rodenticide  Act (7  U.S.C.
                      Section  1361 et seq.),  and the  Occupational  Safety and
                      Health Act (19 U.S.C.  section 651 et seq.), as these laws
                      have  been  amended  or  supplemented,  and any  analogous
                      foreign,   federal,  state  or  local  statutes,  and  the
                      regulations promulgated pursuant thereto.

                               (7)  "Environmental  Loss"  shall  mean any loss,
                      cost,  damage,  liability,  deficiency,  fine,  penalty or
                      expense   (including,   without   limitation,   reasonable
                      attorneys'  fees,  engineering  and other  professional or
                      expert fees), investigation, removal, cleanup and remedial
                      costs (voluntarily or involuntarily incurred) and damages


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       Commission.


                                        - 17 -



<PAGE>



                      to,  loss  of  the  use of or  decrease  in  value  of the
                      Equipment  arising  out  of  or  related  to  any  Adverse
                      Environmental Condition.

                               (8)     "Person"  shall include  any  individual,
                      partnership,     corporation,    trust,     unincorporated
                      organization, government or department  or agency  thereof
                      and any other entity.


         (c) Time is of the essence of this Agreement.  Lessor's  failure at any
time to require strict  performance  by Lessee of any of the  provisions  hereof
shall  not  waive  or  diminish  Lessor's  right  thereafter  to  demand  strict
compliance  therewith.  Lessee  agrees,  upon Lessor's  request,  to execute any
instrument  necessary  or expedient  for filing,  recording  or  perfecting  the
interest of Lessor.  All notices  required to be given hereunder shall be deemed
adequately given if sent by registered or certified mail to the addressee at its
address  stated  herein,  or at such  other  place  as such  addressee  may have
designated  in writing.  This  Agreement,  commitment  letter (if any),  and any
Schedule and Annexes thereto constitute the entire agreement of the parties with
respect to the subject  matter  hereof.  NO  VARIATION OR  MODIFICATION  OF THIS
AGREEMENT OR ANY WAIVER OF ANY OF ITS PROVISIONS OR  CONDITIONS,  SHALL BE VALID
UNLESS IN WRITING  AND SIGNED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE  PARTIES
HERETO.

                                       /s/RLD  /s/LJH
                                       ---------------------------
                                       initials

         (d) In case of a failure of Lessee to comply with any provision of this
Agreement,  Lessor shall have the right,  but shall not be obligated  to, effect
such compliance,  in whole or in part upon at least 10 days prior written notice
to Lessee; and all moneys spent and expenses and obligations incurred or assumed
by Lessor in effecting such compliance shall  constitute  additional rent due to
Lessor within five days after the date Lessor sends notice to Lessee  requesting
payment.  Lessor's  effecting such compliance  shall not be a waiver of Lessee's
default.

         (e) Any rent or other  amount  not paid to  Lessor  when due  hereunder
shall bear interest,  both before and after any judgment or termination  hereof,
at the lesser of * per annum or the maximum rate allowed by law. Any  provisions
in this Agreement and any Schedule  which are in conflict with any statute,  law
or  applicable  rule  shall be deemed  omitted,  modified  or altered to conform
thereto.


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       Commission.



                                        - 18 -



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              (f) So long as Lessee  shall not be in default  hereunder,  Lessor
     warrants to Lessee that Lessee  shall be entitled to possess  quietly  each
     unit of  Equipment,  and that  neither  Lessor nor any party  claiming  by,
     through  or under  Lessor  shall  interfere  with  Lessee's  right of quiet
     possession during the term hereof.

              (g) If there is any conflict  between the terms of this Agreement,
     any Schedule and any  Addendum(s) to this  Agreement or such Schedule,  the
     terms of the  Schedule  shall  prevail  over this  Agreement,  and any such
     Addendum(s) shall prevail over this Agreement and the Schedule.

              (h)  *

         IN WITNESS WHEREOF,  Lessee and Lessor have caused this Agreement to be
executed  by their duly  authorized  representatives  as of the date first above
written.


     LESSOR:                                    LESSEE:
     GENERAL ELECTRIC CAPITAL CORPORATION       NORTH AMERICAN VACCINE, INC.

     By: /s/ R. L. Dauphinais                   By: /s/ Lawrence J. Hineline
         --------------------------------           --------------------------

     Title: Sr. Trans. Manager                  Title: Vice President - Finance
            -----------------------------              ------------------------














[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


                                        - 19 -



<PAGE>


                                  SCHEDULE NO.  001
                            DATED THIS November 1,  1996
                              TO MASTER LEASE AGREEMENT
                                DATED AS OF 11/1, 1996

Lessor & Mailing Address:                         Lessee & Mailing Address:

GENERAL ELECTRIC CAPITAL CORPORATION              NORTH AMERICAN VACCINE, INC.
4 North Park Drive                                12103 Indian Creek Court
Suite 500                                         Beltsville, Maryland 20705
Hunt Valley, Maryland 21030

Capitalized terms not defined herein shall have the meanings assigned to them in
the Master Lease Agreement  identified  above  ("Agreement";  said Agreement and
this Schedule being collectively referred to as "Lease").

     A.       Equipment
              ---------

              Pursuant  to the  terms of the  Lease,  Lessor  agrees to lease to
              Lessee the Equipment  listed on Annex A attached hereto and made a
              part hereof.  Such  Equipment was  previously  leased by Lessor to
              Cephalon,   Inc.   ("Cephalon")   as  part  of  a   sale-leaseback
              transaction.   Lessor  represents  and  warrants  to  Lessee  that
              Cephalon's   leasehold  interest  in  and  to  the  Equipment  has
              terminated.  Lessor  purchased the Equipment from Cephalon and has
              not transferred its interest in the Equipment.

     B.       Financial Terms
              ---------------

              1.  Advance Rent (if any):  $   N/A
              2.  Capitalized Lessor's Cost:  $ 7,664,605
              3.  Basic Term Lease Rate Factor:  *
              4.  Daily Lease Rate Factor:   *
              5.  Basic Term  (No.  of Months):    48
              6.  Basic Term  Commencement Date:  November  1, 1996
              7.  Equipment Location:  *
              8.  Lessee  Federal Tax  ID No.:  98-0121241
              9.  Supplier:  N/A
              10. Last Delivery Date:  N/A

     C.       Tax Benefits
              ------------
              Depreciation Deductions:
              a.  Depreciation Method:  *
              b.  Recovery Period: *
              c.  Basis: *
              d.  This Equipment  has been Leased to  a non  related third party
              from  December  29, 1994 until  October  31,  1996.  The  Lessee's
              representations regarding items a, b and c in this Section C shall
              be limited to such Tax  Benefits  that remain from the date hereof
              through the end of the Term.



[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>


     D.       Term and Rent
              -------------

              1. Basic Term Rent. Commencing on November 1, 1996 and on the same
              day of each month thereafter  (each, a "Rent Payment Date") during
              the Basic Term,  Lessee  shall pay as rent ("Basic Term Rent") the
              product  of the  Basic  Term  Lease  Rate  Factor  times  the then
              Capitalized Lessor's Cost of all Equipment on this Schedule.

     E.       Insurance
              ---------

              1.    Public Liability:  $1MM total liability per occurrence.
              2.    Casualty  and Property Damage:   An  amount equal to the
                    higher  of  the  Stipulated  Loss  Value   or  the  full
                    replacement cost of the Equipment.

Except as expressly  modified hereby,  all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the  Agreement or Equipment  until  executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.

         IN WITNESS  WHEREOF,  Lessee and Lessor have caused this Schedule to be
executed  by their duly  authorized  representatives  as of the date first above
written.


LESSOR:                                    LESSEE:

GENERAL ELECTRIC CAPITAL                   NORTH  AMERICAN  VACCINE, INC.
CORPORATION

By:  /s/ R. L. Dauphinais                  By:  /s/ Lawrence J. Hineline
     ----------------------                    ---------------------------

Name:  R. L. Dauphinais                    Name: Lawrence J. Hineline
     ----------------------                     --------------------------

Title:  Sr. Trans. Manager                 Title: Vice President - Finance
       --------------------                       ------------------------



<PAGE>


                                       ANNEX A
                                          TO
                                  SCHEDULE NO.  001
                              TO MASTER LEASE AGREEMENT
                             DATED AS OF NOVEMBER 1, 1996



                 SERIAL NUMBER             NUMBER           COST
MANUFACTURER     TYPE/MODEL                OF UNITS         PER UNIT



                      *

























Initials:
/s/ RLD                                    /s/ LJH
--------------------------                 ------------------------------
Lessor                                     Lessee






[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>


                                     ANNEX C
                                       TO
                                SCHEDULE NO. 001
                            TO MASTER LEASE AGREEMENT

                          DATED AS OF NOVEMBER 1, 1996

                            CERTIFICATE OF ACCEPTANCE
                            -------------------------




To: General Electric Capital Corporation ("Lessor")

         Pursuant  to  the   provisions   of  the  above   schedule   and  lease
(collectively,  the "Lease",),  Lessee hereby certifies and warrants that Lessee
accepts the Equipment for all purposes of the Lease and all attendant documents.

         Lessee does  further  certify  that as of the date hereof (i) Lessee is
not in default under the Lease; and (ii) the representations and warranties made
by  Lessee  pursuant  to or under the  Lease  are true and  correct  on the date
hereof.

                            /s/ Lawrence J. Hineline, Vice President-Finance
                            -------------------------------------------------
                            Lessee's Authorized Representative



Dated:  November 12, 1996


<PAGE>

                           ANNEX D TO SCHEDULE NO. 001
                            TO MASTER LEASE AGREEMENT
                          DATED AS OF November 1, 1996

                          STIPULATED LOSS VALUE TABLE*
                          ----------------------------


     Nov-01-96                        1                          *
     Dec-01-96                        2                          *
     Jan-01-96                        3                          *
     Feb-01-97                        4                          *
     Mar-01-97                        5                          *
     Apr-01-97                        6                          *
     May-01-97                        7                          *
     Jun-01-97                        8                          *
     Jul-01-97                        9                          *
     Aug-01-97                       10                          *
     Sep-01-97                       11                          *
     Oct-01-97                       12                          *
     Nov-01-97                       13                          *
     Dec-01-97                       14                          *
     Jan-01-98                       15                          *
     Feb-01-98                       16                          *
     Mar-01-98                       17                          *
     Apr-01-98                       18                          *
     May-01-98                       19                          *
     Jun-01-98                       20                          *
     Jul-01-98                       21                          *
     Aug-01-98                       22                          *
     Sep-01-98                       23                          *
     Oct-01-98                       24                          *
     Nov-01-98                       25                          *
     Dec-01-98                       26                          *
     Jan-01-99                       27                          *
     Feb-01-99                       28                          *
     Mar-01-99                       29                          *
     Apr-01-99                       30                          *
     May-01-99                       31                          *
     Jun-01-99                       32                          *
     Jul-01-99                       33                          *
     Aug-01-99                       34                          *
     Sep-01-99                       35                          *
     Oct-01-99                       36                          *
     Nov-01-99                       37                          *
     Dec-01-99                       38                          *
     Jan-01-00                       39                          *
     Feb-01-00                       40                          *
     Mar-01-00                       41                          *

[*]    Confidential  information has been omitted and filed  separately with the
       Commission.
<PAGE>



     DATE                         PAYMENT #             STIPULATED LOSS VALUE
     ----                         ---------             ---------------------

     Apr-01-00                       42                          *
     May-01-00                       43                          *
     Jun-01-00                       44                          *
     Jul-01-00                       45                          *
     Aug-01-00                       46                          *
     Sep-01-00                       47                          *
     Oct-01-00                       48                          *

         * The Stipulated Loss Value for any unit of Equipment shall be equal to
the  Capitalized  Lessor's  Cost  of such  unit  multiplied  by the  appropriate
percentage  derived from the above table. In the event that the Lease is for any
reason  extended,  then the last  percentage  figure  shown above shall  control
throughout any such extended term.

         Note:  The  Capitalized  Lessors  Cost of any line item of equipment in
Annex A shall  be  equal to the  dollar  volume  in the  column  labeled  "Total
Funding"  on page 1 of Annex A or "Net Book  Value" on pages 2 - 21 (as the case
may be) multiplied by *

                      Initials:  /s/ RLD                /s/  LJH
                                ------------------      ------------------
                               Lessor                   Lessee




























     [*]      Confidential information  has  been omitted  and filed  separately
              with the Commission.


<PAGE>

                                 ADDENDUM NO. 1
                            TO MASTER LEASE AGREEMENT
                          DATED AS OF NOVEMBER 1, 1996

THIS ADDENDUM (this  "ADDENDUM")  amends and  supplements  the above  referenced
lease (the "Lease"), between GENERAL ELECTRIC CAPITAL CORPORATION ("LESSOR") and
NORTH AMERICAN  VACCINE,  INC.  ("LESSEE") and is hereby  incorporated  into the
Lease as though fully set forth therein. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Lease.

The Lease is hereby amended as follows:

          1.    XXI.  FINANCIAL COVENANTS.

               (a) At all  times  during  the term of the  Lease,  Lessee  shall
maintain:  (i)  Tangible  Net Worth of * (ii) A Current  Ratio of *; (iii) Total
Liabilities to Tangible Net Worth of *; (iv) unrestricted cash, cash equivalents
and/or marketable securities (collectively  "UNRESTRICTED CASH") of * or, Lessee
shall  within  fifteen  (15) days after  Lessee  ceases to  satisfy  any of such
requirements  cause to be delivered to Lessor an  irrevocable  standby letter of
credit as described in Section  XXI(c)  below.  "TOTAL  LIABILITIES"  shall mean
Lessee's total liabilities less convertible  subordinated debt and "TANGIBLE NET
WORTH"  shall mean  Lessee's  tangible net worth plus  convertible  subordinated
debt.  Unrestricted  Cash  shall  be  shown  net  of  any  contingent  liability
associated with other lease cash triggers or pledge  agreements  unless Lessee's
obligations  under these agreements are deemed by Lessor to be less restrictive.
"CURRENT RATIO" shall mean current assets divided by current liabilities. Except
as defined  herein,  accounting  terms used herein shall be as defined,  and all
calculations hereunder shall be made, in accordance with GAAP.

               (b) Lessee's chief  financial  officer shall notify Lessor of the
amount of Lessee's  Unrestricted Cash and shall certify that such amounts are in
compliance with the requirements of Section XXI(a) above,  such notification and
certification  shall be provided  within fifteen (15) days after the end of each
month,  reflecting  such  information  as of the  end of the  month  immediately
preceding such month.  Lessee's chief financial officer shall also notify Lessor
the amount of Lessee's  Tangible Net Worth,  Total  liabilities  to Tangible Net
Worth  ratio and  Current  Ratio,  and shall  certify  that such  amounts are in
compliance with the requirements of Section XXI(a) above,  such notification and
certification  shall be provided  within fifteen (15) days after the end of each
month,  reflecting  such  information  as of the  end of the  month  immediately
preceding  such  month.  If Lessee is unable  or fails  timely to  provide  such
notification  and compliance  certificates,  within fifteen (15) days after such
failure,  Lessee shall cause to be delivered  to Lessor an  irrevocable  standby
letter of credit as described in Section  XXI(c) below  ("Letter of Credit").  A
failure by Lessee to provide such Letter of Credit or otherwise comply with this
Section XXI shall be a default hereunder.

               (c) The irrevocable standby letter of credit provided pursuant to
this Addendum shall be *


[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>


         2.   XXII. FINANCIAL COVENANTS RELEASE.

              At any time if Lessee is not in default, Lessee may provide Lessor
with a letter of credit  substantially  in the form of Exhibit A attached hereto
(or such other form as may be acceptable to Lessor in its sole discretion) equal
to * . Upon providing this Letter of Credit,  the Financial  Covenants stated in
Section XXI and Lessee's  obligations  under those  Financial  Covenants will be
considered in abeyance,  except as described  further in this paragraph.  Lessee
may later  request  in  writing  that  Lessor  return  the  Letter of Credit and
re-instate  the  financial  covenants.  Lessor  agrees to do so as long as:  (1)
Lessee is not in default;  (2) a default by Lessee is not reasonably imminent in
the  judgment of Lessor;  and (3) Lessee  would not have been in default had the
Financial Covenants not been put into abeyance. Lessee may exercise its right to
provide a letter of credit as  described in this Section XXII * times during the
term of the Lease.

         Except as expressly  modified  hereby,  all terms and provisions of the
Lease shall  remain in full force and effect.  This  Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.

IN WITNESS  WHEREOF,  Lessee and Lessor have caused this Addendum to be executed
by their duly authorized representatives as of the date first above written.

LESSEE:                                    LESSOR:

NORTH AMERICAN VACCINE, INC.               GENERAL ELECTRIC CAPITAL CORPORATION

By: /s/ Lawrence J. Hineline               By: /s/ R. L. Dauphinais
    --------------------------                 ---------------------
Its: Vice President - Finance              Its: Sr. Trans Manager
    -------------------------                  ---------------------
Dated:  November 12, 1996                  Dated: November 12,1996
       -----------------------                    ------------------














[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>


                                 ADDENDUM NO. 1
                               TO SCHEDULE NO. 001
                            TO MASTER LEASE AGREEMENT
                          DATED AS OF NOVEMBER 1, 1996

         This  ADDENDUM  (this  "Addendum")  amends  and  supplements  the above
referenced  schedule  (the  "Schedule")  to  the  above  referenced  lease  (the
"Lease"),  between GENERAL  ELECTRIC  CAPITAL  CORPORATION  ("Lessor") and NORTH
AMERICAN VACCINE,  INC.  ("Lessee") and is hereby incorporated into the Schedule
as though  fully set forth  therein.  Capitalized  terms not  otherwise  defined
herein shall have the meanings set forth in the Lease.

1.       For  purposes  of this  Schedule  only,  Section  XVIII of the Lease is
amended by deleting and replaced with the following:

         EARLY PURCHASE OPTION.

                    (a)   Provided   that  the  Lease  has  not  been  earlier
         terminated and provided further that Lessee is not in default under the
         Lease or any other  agreement  between  Lessor and Lessee,  Lessee may,
         UPON AT LEAST * PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S  IRREVOCABLE
         ELECTION TO EXERCISE SUCH OPTION,  purchase all (but not less than all)
         of the  Equipment  listed and  described  in this  Schedule on the rent
         payment date (the "Early  Purchase Date") * for a price equal to * (the
         "FMV Early Option Price"),  plus all applicable sales taxes on an AS IS
         BASIS.  Lessor and Lessee  agree that the FMV Early  Option  Price is a
         reasonable prediction of the Fair Market Value (as such term is defined
         in Section  XVIII(b) hereof) of the Equipment at the time the option is
         exercisable.   Lessor  and  Lessee  agree  that  if  Lessee  makes  any
         non-severable improvement to the Equipment which increases the value of
         the Equipment and is not required or permitted by Sections VII or XI of
         the Lease  prior to lease  expiration,  then at the time of such option
         being  exercised,  Lessor and Lessee shall adjust the purchase price to
         reflect  any  addition  to the price  anticipated  to result  from such
         improvement.  (The purchase option granted by this subsection  shall be
         referred to herein as the "Early Purchase Option".)

                    (b) If Lessee  exercises  its Early  Purchase  Option with
         respect to the Equipment leased  hereunder,  then on the Early Purchase
         Option Date, Lessee shall pay to Lessor any Rent and other sums due and
         unpaid on the Early  Purchase  Option Date and Lessee shall pay the FMV
         Early Option Price, plus all applicable sales taxes, to Lessor in cash.
         Upon receipt of the Fair Market Value, plus all applicable sales taxes,
         Lessor  shall  execute  and  deliver to Lessee a bill of sale,  without
         representations  or  warranty,  except that the  Equipment  is free and
         clear of any  liens,  claims or  encumbrances  created by Lessor or any
         party claiming by, through or under Lessor and other than those created
         by Lessee or anyone claiming by, through or under Lessee.

2.       For purposes of this Schedule only, the following  additional Financial
         Terms are added to Paragraph B of the Schedule:

         *


[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>



3.       For purposes of this Schedule only, the following is added to Paragraph
         D of the Schedule:

               4.  Secondary  Term Rent.  Unless the  Schedule  has been earlier
         terminated  as  provided  therein,  commencing  on the  Secondary  Term
         Commencement Date and on the same day of each month thereafter (each, a
         "Rent Payment  Date",) during the Secondary  Term,  Lessee shall pay as
         rent  ("Secondary  Term Rent",) the product of the Secondary Term Lease
         Rate Factor times the  Capitalized  Lessor's  Cost of all  Equipment on
         this Schedule.

4.   For purposes of this Schedule only, Section  XVIII(a) of the  Agreement is
hereby deleted in its entirety and the following is substituted therefor:

              (a) So long as no default  exists  hereunder and the Lease has not
           been  earlier  terminated,  Lessee  may  at  the  expiration  of  the
           Secondary  Term  upon at  least * prior  written  notice  to  Lessor,
           purchase  all  (but  not  less  than  all) of the  Equipment  in this
           Schedule  on an AS IS BASIS,  for cash equal to its then Fair  Market
           Value (plus all applicable sales taxes).

5.    For purposes of this Schedule  only,  the  following  is added to the end
thereof:

END OF BASIC TERM OPTIONS:

         At the expiration of the Basic Term (the "Basic Term Expiration Date"),
so  long as no  default  has  occurred  and is  continuing  hereunder  and  this
Agreement  has not been earlier  terminated,  Lessee  shall  exercise one of the
following options:

                      (i) EXTENSION  OPTION.  Lessee may extend the Lease beyond
           the Basic Term Expiration Date with respect to all (but not less than
           all) of the Equipment  covered by this Schedule through the Secondary
           Term set forth in this Schedule and Lessee shall pay  Secondary  Term
           Rent as set forth in this Schedule.

                      (ii) PURCHASE  OPTION.  Upon at least * written  notice to
           Lessor prior to the  expiration of the Basic Term,  purchase all (but
           not less than all) of the Equipment covered by this Schedule on an AS
           IS WHERE IS basis  without  representation  or  warranty,  express or
           implied ("AS IS BASIS",) for cash equal to * which amount  Lessor and
           Lessee agree is a reasonable  prediction of the Fair Market Value (as
           such term is defined in Section  XVIII(b) hereof except that it shall
           be the Lessee's right to choose an independent qualified appraiser if
           the  parties  can't  agree  as to the  Fair  Market  Value  and  such
           appraiser's  determination of FMV shall be final and binding upon the
           parties)  of the  Equipment  at the time the  option is  exercisable.
           



[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>



           Lessor  and  Lessee  agree  that if Lessee  makes  any  non-severable
           improvement  to  the  Equipment  which  increases  the  value  of the
           Equipment  and is not  required or permitted by Sections VII or XI of
           the Lease prior to lease expiration, then at the time of the exercise
           of this option,  Lessor and Lessee shall adjust the purchase price to
           reflect  any  addition to the price  anticipated  to result from such
           improvement.  On the Basic Term Expiration Date, Lessor shall receive
           in cash the full  purchase  price (plus all  applicable  sales taxes)
           together with any Rent or other sums then due under the Lease on such
           date.  Lessee  shall be deemed to have waived this option if it fails
           to timely  provide  Lessor with the  required  written  notice of its
           election  to  exercise  the same or unless it  provides  Lessor  with
           written  notice of its  irrevocable  election  to  exercise  the same
           within * after Fair  Market  Value is  determined  (by  agreement  or
           appraisal).

         Except as expressly  modified  hereby,  all terms and provisions of the
Lease shall  remain in full force and effect.  This  Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.

         IN WITNESS  WHEREOF,  Lessee and Lessor have caused this Addendum to be
executed  by their duly  authorized  representatives  as of the date first above
written.

LESSOR:                                           LESSEE:

GENERAL ELECTRIC CAPITAL CORPORATION              NORTH AMERICAN VACCINE, INC.

By: /s/ R. L. Dauphinais                          By: /s/ Lawrence J. Hineline
-----------------------------------                   --------------------------

Its: Sr. Trans. Manager                           Its: Vice President - Finance
-----------------------------------                    ------------------------





[*]    Confidential  information has been omitted and filed  separately with the
       Commission.


<PAGE>

                           ADDENDUM NO. 2 TO SCHEDULE NO. 1
                              TO MASTER LEASE AGREEMENT
                             DATED AS OF NOVEMBER 1, 1996


         THIS ADDENDUM amends and supplements the above referenced schedule (the
"Schedule")  to the above  referenced)  lease  (the  "Lease"),  between  GENERAL
ELECTRIC  CAPITAL  CORPORATION  ("Lessor")  and NORTH  AMERICAN  VACCINE,  INC..
("Lessee")  and is hereby  incorporated  into the  Schedule as though  fully set
forth  therein.  Capitalized  terms not otherwise  defined herein shall have the
meanings set forth in the Lease.

         For the purposes of this Schedule only Section XI is hereby  amended as
follows:

RETURN  PROVISIONS:  In addition to the  provisions of Section XI of this Lease,
and provided  that Lessee has not elected to exercise its option to purchase the
Equipment, Lessee shall, at its expense:

         (a) At least  ninety  (90) days and not more than two hundred ten (210)
days prior to expiration or earlier termination of the Lease,  provide to Lessor
a detailed  inventory of all components of the Equipment.  The inventory  should
include,  but not be limited  to, a listing of model and serial  numbers for all
components comprising the Equipment.

         (b)  At  least  ninety  (90)  days  prior  to   expiration  or  earlier
termination  of the  Lease,  with  reference  to  computer  and  computer  based
equipment comprising the Equipment,  provide to Lessor a detailed listing of all
internal  circuit  boards by both the model and serial  number for all  hardware
comprising  the  Equipment  and  a  listing  of  all  software  features  listed
individually.

         (c)  At  least  ninety  (90)  days  prior  to   expiration  or  earlier
termination of the Lease, upon receiving reasonable notice from Lessor,  provide
or cause the  vendor(s) or  manufacturer(s)  to provide to Lessor the  following
documents:  (1) one set of service manuals,  blue prints,  process flow diagrams
and operating manuals including replacements and/or additions thereto, such that
all  documentation  is  completely  up-to-date;  and (2)  one set of  documents,
detailing equipment configuration,  operating requirements, maintenance records,
and other  technical data  concerning the set-up and operation of the Equipment,
including  replacements and/or additions thereto, such that all documentation is
completely up-to-date.

         (d)  At  least  ninety  (90)  days  prior  to   expiration  or  earlier
termination of the Lease, upon receiving reasonable notice from Lessor, make the
Equipment available for on-site operational inspections by potential purchasers,
above  ground  and  under  power,  and  provide   personnel,   power  and  other
requirements  necessary to  demonstrate  electrical,  mechanical and bio reactor
systems for each item of the  Equipment;  provided  however,  that such  persons
shall comply with any  reasonable  conditions  imposed by Lessee  regarding such
inspection of Equipment in Lessee's manufacturing areas.


<PAGE>


         (e)  At  least  ninety  (90)  days  prior  to   expiration  or  earlier
termination of the Lease, cause the manufacturer's representative or a qualified
equipment maintenance provider, acceptable to Lessor, to perform a comprehensive
physical  inspection,  including  testing all  material and  workmanship  of the
Equipment;  and if during such inspection,  examination and test, the authorized
inspector  finds any of the  material  or  workmanship  to be  defective  or the
Equipment not operating within the  manufacturer's  specifications,  then Lessee
shall repair or replace such defective  material and, after corrective  measures
are completed,  Lessee will provide for a follow-up  inspection of the Equipment
by the authorized inspector as outlined in the preceding clause.

         (f) Have each item of Equipment returned with an in-depth field service
report detailing said inspection as outlined in Section e of this Addendum.  The
report shall certify that the Equipment  has been properly  inspected,  examined
and tested and is operating within the manufacturer's specifications.

         (g)  Provide  that  all  Equipment  will be  cleaned  and  cosmetically
acceptable,  and in such condition so that it may be  immediately  installed and
placed into use in a similar environment.

         (h) Properly remove or treat all rust or corrosion.

         (i)  Ensure  all  items  of  Equipment,  where  appropriate,   will  be
completely sterilized, steam-cleaned and de-greased upon redelivery.

         (j)  Properly  remove  all  Lessee  installed  markings  which  are not
necessary  for  the  installation,  operation,  maintenance  or  repair  of  the
Equipment.

         (k)  Ensure  all  Equipment  and  equipment  operations  conform to all
applicable  local,  state,  and  federal  laws,  health  and  safety  guidelines
(including the then U.S. Food and Drug Administration regulations).

         (l) Ensure the Equipment shall be mechanically and structurally  sound,
capable of performing  the  functions  for which the  Equipment  was  originally
designed,  in  accordance  with the  manufacturer's  published  and  recommended
specifications.

         (m)  Provide  for  the  deinstallation,   packing,   transporting,  and
certifying  of the Equipment to include,  but not be limited to, the  following:
(1) the manufacturer's  representative shall de-install all Equipment (including
all wire, cable and mounting  hardware) in accordance with the specifications of
the manufacturer; (2) each item of Equipment will be returned with a certificate
supplied by the manufacturer's  representative qualifying the Equipment to be in
good  condition  and (where  applicable)  to be eligible for the  manufacturer's
maintenance  plan;  the  certificate  of eligibility  shall be  transferable  to
another  operator of the Equipment;  (3) the Equipment  shall be packed properly
and in accordance to the  manufacturer's  recommendations;  and (4) Lessee shall
transport  the  Equipment  in  a  manner  consistent  with  the   manufacturer's
recommendations and practices.


<PAGE>

         (n) Provide for the  deinstallation  and  packing of the  Equipment  to
include,  but not be limited to, the following:  (1) all process fluids shall be
removed from the Equipment  and disposed of in accordance  with the then current
waste  disposal laws and  regulations.  At no time are materials  which could be
considered  hazardous  waste by any  regulatory  authority  to be  shipped  with
machinery;  (2) all internal  fluids such as lube oil and hydraulic fluid are to
be filled to operating  levels;  filler caps are to be secured and  disconnected
hoses are to be sealed to avoid spillage; (3) the manufacturer's  representative
shall  deinstall  all  Equipment in accordance  with the  specifications  of the
manufacturer;  and (4) the Equipment  shall be packed properly and in accordance
with the manufacturer's recommendations.

         (o) Upon sale of the Equipment to a third party, provide transportation
to not more  than  three (3)  individual  locations  anywhere  within a 500 mile
radius of the original Equipment location elected by Lessor.

         (p) Obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the  replacement  value of the Equipment and Lessor
shall be named as the loss payee on all such policies of insurance.

         (q) With regard to any Equipment that has been modified or reconfigured
by Lessee,  return or restore the  Equipment to its original  configuration,  as
specified  by  the  manufacturer   including  all  upgrades   installed  by  the
manufacturer.

         Except as expressly  modified  hereby,  all terms and provisions of the
Lease  shall  remain in full force and effect.  This  Addendum is not binding or
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.

         IN WITNESS  WHEREOF,  Lessee and Lessor have caused this Addendum to be
executed  by their duly  authorized  representatives  as of the date first above
written.

LESSOR:                                      LESSEE:

GENERAL ELECTRIC CAPITAL CORPORATION         NORTH AMERICAN VACCINE, INC.


By: /s/ R. L. Dauphinais                      By: /s/ Lawrence J. Hineline
    -------------------------                     --------------------------

Name: R. L. Dauphinais                        Name: Lawrence J. Hineline
      -----------------------                       ------------------------

Title: Sr. Trans Manager                      Title: Vice President - Finance
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